Europe

eif-invests-e40m-in-female-founded-climate-tech-growth-fund

EIF invests €40M in female-founded climate tech growth fund

Ecosystems, Europe, Investors and funding, Next Featured, Sustainability / /

The European Investment Fund (EIF) announced today it would invest €40mn with Blume Equity. Based out of London, the VC was founded by three women in 2020, and invests into European high-growth climate tech scaleups. 

Blume Equity backs companies focusing on decarbonisation as well as broader environmental sustainability. These include carbon accounting platform Normative, sustainable femtech startup Elvie, Matsmart Motatos that looks to combat food waste, and IoT industrial SME data support provider Sensorfact. 

The €40mn comes from the InvestEU program as part of the EIF’s mission to support high-growth and innovative SMEs across Europe, along with a regional mandate from the Dutch Future Fund. EIF joins other Blume Equity investors, including Swedish pension fund AP4 and Visa Foundation. 

“By supporting Blume with one of the largest investments EIF has made to a first time fund, the European Union highlights its commitment both to the environment and to supporting the growth-stage ecosystem in Europe,” said Clare Murray, one of Blume Equity’s co-founders and partners. “This partnership will help us continue our profit with purpose mission to support entrepreneurs tackling the climate emergency.”

Cutting-edge technology to play a major role in EU green transition

Climate tech investment pace has suffered along with other funding over the past year. However, there is reason for optimism for the sector — ironically, much due to the all-too immediate urgency of tangible climate events, such as the wildfires and floods of the summer. 

According to a report published by the Economist last week, VC investment in climate tech has surged over the past decade. Meanwhile, the recent slowing down highlights the need for a diversification of funding sources. This includes government agencies and alternative pools of capital, such as pension funds. 

“The green transition must be accelerated to meet our current climate and environmental challenges,” EIF Chief Executive Marjut Falkstedt commented. “Innovation in all sectors of our economy and cutting-edge technology will play a major role in achieving it. With the backing of the InvestEU programme and the Dutch Future Fund, we are very happy to invest in the female-led Blume Equity Fund to support disruptive businesses with a positive impact on people and planet.”

More money for climate tech to grow

Meanwhile, London-based HSBC also announced today it would make $1bn (€940mn) in funding available to climate tech startups globally. The banking and financial services company said it expected the funds to go toward EV charging, battery storage, carbon removal technologies, and sustainable food and agriculture. Indeed, the Economist study identified food and agriculture technology as a sector that is receiving disproportionately little funding compared to its contribution to global carbon dioxide emissions. 

Furthermore, HSBC also launched a new climate-tech venture capital strategy, and will invest $100mn (€94mn) in Breakthrough Energy Catalyst, a separate platform that supports cleaner energy source technologies.   

“Access to finance is critical for early-stage climate tech companies to create and scale real-world solutions,” said Barry O’Byrne, CEO of global commercial banking at HSBC. They also need ample support in making the jump from early to late stage — a funding gap that is gaining more and more attention. 

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Europe’s homes are wasting too much energy – these startups have a plan

Europe, Next Featured, Startups and technology, Sustainability / /

Single-glazing. Old electric-powered heat emitters. Walls with hardly any insulation. Damp throughout the ground floor. Welcome to Europe. 

While these problems vary in prevalence from country to country, even nations rated highly in assessments of household energy efficiency have room for improvement. Sweden, for instance, often does very well in such analyses. But for Magnus Petersson, cofounder and chief executive of Stockholm-based Dryft, there’s plenty of work still to do.

“We need to fundamentally transform the houses,” he says. Dryft, a startup with 150 employees that has raised €6 million to date, numbers itself among a fleet of new businesses targeting the energy renovation market. 

Petersson and his fellow cofounders noticed rising demand for home retrofits around 2019. That demand has only rocketed since because of energy price rises caused by Russia’s invasion of Ukraine.

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Dryft and others like them are using tech to help homeowners find out how efficient their home really is — and what they can do to improve it. The treatments these firms propose will differ dramatically from house to house but the idea in general is to offer “holistic” advice.

Companies such as Dryft aren’t just about selling you a new heating system – the point, they say, is to find out the most suitable methods for making a dwelling more efficient within a certain budget, whatever those methods may be. 

Some homes will need lots more insulation, while others will already have that but require a more efficient method of ventilating the internal spaces, for example. Where would a homeowner’s cash best be spent?

Energy Tetris

“When we sell energy renovation to you as a customer, that energy renovation is a Tetris made up of different services,” says Petersson, referring to the popular block-sorting video game in his analogy. 

With Dryft, customers get a free 30-minute video consultation where they can talk through features of their property with an energy adviser. This yields a summary of what kind of retrofit might best suit the dwelling and how much it could cost. If the customer decides to proceed, Dryft conducts a more in-depth survey and can then go on and actually do the required renovation work as well.

The company currently covers the Greater Stockholm area but has plans to expand across Europe. Since 2020, Dryft has carried out renovation projects large and small in nearly 6,000 homes.

Petersson explains how the firm’s algorithm estimates the projected energy savings post-renovation. This algorithm is constantly being refined with data on the outcome of real Dryft projects, he adds, meaning that it ought to get more and more accurate over time. 

As an example, he shares a case study of a 1970-built, four-bedroom house in Stockholm. Dryft upgraded the double-glazing to triple-glazing, installed a heat pump, ventilation system with heat recovery, and also some smart controls. The whole renovation cost the equivalent of €38,000 and the household is currently saving €2,900 per year in energy expenditure. 

At that rate, it will take about 12-13 years to recoup the investment. In the meantime, annual energy consumption in the property has plummeted by more than 40% and its Energy Performance Certificate (EPC) rating has jumped from G to C. This should increase the value of the property, notes Petersson.

Show me the money

There’s no doubt that extensive energy retrofits are not cheap. Dryft and startups in the same market are also trying to help customers take advantage of government subsidies or grants. 

“People are planning renovation roadmaps and that is what we are actually showing to our customers,” explains Justus Menten, cofounder of Enter, an energy retrofit-focused startup in Berlin. 

Enter offers financing options to help people pay for their energy renovation in instalments and the firm supports customers in seeking out applicable subsidies that could lessen the upfront cost of the work they want to do. Enter works with partner companies who carry out the actual plumbing, engineering work, or installation of insulation, for example.

The startup, which has 135 employees and has raised €19.4 million so far, has around 1,000 paying customers per month, adds Menten. Enter has an app that can estimate the energy demands of a dwelling and how specific retrofit projects — say, upgrading the loft insulation — will impact that. 

Customers can try out different energy renovation measures and see the projected results in terms of emissions savings, reduced costs, and the potential increased value of their property, for example. A virtual retrofit before you decide on the real thing.

Enter also has a team of experts who subsequently survey each dwelling and confirm the accuracy of the app’s suggestions and projections.

Tools that help homeowners understand what renovation measures are available, and what their impacts might be, are much needed at present, say observers.

“From my research, there is a huge gap for householders to find high-quality information – that can delay renovations taking place,” says Kate Simpson at Imperial College London, who has studied the use of data in energy renovations. She notes that it can be difficult to accurately predict energy savings post-renovation because there are so many factors that affect consumption, from the weather to how much the occupants decide to heat their home.

Crucially, startups gathering data about energy consumption must ensure that they have consent to do so, she adds.

Data is key

Data protection is very important, though access to useful information on the current energy efficiency of homes around Europe is far from standardised, notes Michael Hanratty, chief executive of BERWOW, a startup in the Republic of Ireland. 

BERWOW uses an automated tool to analyse data from the Irish equivalent of an EPC – a Building Energy Rating (BER) certificate. The tool proposes energy renovation interventions that might be suitable for a given dwelling. These suggestions can be followed up with an on-site survey to get formal quotations for specific works.

Hanratty explains that the firm’s digital tool, built by Dublin-based tech firm Gamma Location Labs, was ready to go in 2017 but new GDPR legislation regarding data protection in 2018 meant BERWOW had to come up with a different system for accessing individual users’ own BER certificates. It requires users to provide their unique electricity meter number and upload proof of address to an online system before the BER can be released to BERWOW for analysis. 

“You’d imagine with the urgency of the climate crisis that there could be easier solutions to accessing this data,” says Hanratty. Homeowners who don’t yet have a BER for their property, or who don’t want to open up access to it, can select from one of 60 generalised Irish dwelling types to get an approximated result.

Hanratty adds that he hopes to expand BERWOW to other countries, though the methodology for retrieving EPC information differs greatly from country to country within Europe, he points out. 

Since launch, BERWOW has clocked more than 60,000 visitors to its live tool, which is published on the websites of SSE Airtricity, a major local energy provider in Ireland, among others. Those initial enquiries have resulted in a total of 2,400 surveys of properties to date. 

BERWOW has one employee — Hanratty — and has not needed to raise any external funding, besides initial research funding of €112,000 from the Sustainable Energy Authority of Ireland.

Thinking big

There are plenty of private homeowners with the means to carry out their own renovations around the continent. But they are just one slice of the pie. What about the big businesses that construct large residential developments, or social housing providers?

In the UK, Hubb is targeting such organisations. The company has its own software that creates a digital twin of a specific property. Hubb’s machine learning system can then model how to make each dwelling more energy efficient. Founder and chief executive James Major says he wants to do this on a big scale and is currently in discussions with two large companies in the UK — though no contracts have been signed just yet.

Major wants to demonstrate to firms constructing thousands of houses that, should they improve the energy performance of these buildings even slightly, there could be massive reductions in demand on the electricity grid, for instance.

“If you increase your fabric improvements by 10% or 15%, we could save X amounts of megawatts that you need to connect to your development,” says Major. And this could apply to existing properties requiring a retrofit, too. Doing it at scale would in principle cut down local energy demand drastically.

With the climate crisis worsening while millions of homes around Europe still require energy renovations of some kind, and with consumers expressing their desire to spend significantly less on heating in our age of inflation, it may be time to think big – and fast — about retrofits.

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world’s-first-crewed-liquid-hydrogen-plane-takes-off

World’s first crewed liquid hydrogen plane takes off

Europe, Next Featured, Startups and technology, Sustainability / /

At a somewhat small and unassuming airport in Maribor, Slovenia, German hydrogen propulsion startup H2FLY has quietly been building up to a major milestone in zero-emission aviation over the summer. And all the hard work has come to fruition, with the successful completion of the world’s first crewed liquid hydrogen-powered flights. 

Before any aviation history enthusiast out there goes “but what about the Tupolev Tu-155?” — yes, the Soviets did try out liquid hydrogen as fuel 35 years ago, but only for one of the three engines. In contrast, H2FLY’s HY4 has now operated using only liquid hydrogen (as opposed to the gaseous kind) as fuel, relying solely on the hydrogen fuel-cell powertrain for the entire flight.

On Thursday, this TNW reporter was present for the fourth in a series of test flights. The event marked the culmination of Project HEAVEN, an EU-funded partnership undertaking to demonstrate the feasibility of using liquid, cryogenic hydrogen in aircraft. (That is short for High powEr density FC System for Aerial Passenger VEhicle fueled by liquid HydrogeN, just FYI.)

Liquid vs. gaseous hydrogen as aircraft fuel

While yesterday’s demonstration flight lasted somewhere around the 10-minute mark, a few days prior, the HY4 and its two pilots stayed in the air for 3 hours and 1 minute — a feat that required 10kg of hydrogen. If using up the aircraft’s full storage capacity of 24kg, it could stay up for 8 hours. 

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“It feels really amazing, it is the perfect teamwork coming to life,” said one of the pilots, Johannes Garbino-Anton, after the flight. He added that the technology “works perfectly,” and that the biggest difference to a normal aircraft is the lack of vibrations and noise. And, the lack of carbon dioxide emissions. 

The two test pilots after the flight
The mood was distinctly jubilant following the series of four successful test flights. Credit: Linnea Ahlgren/TNW

H2FLY’s propulsion system consists of hydrogen storage, a 120kW fuel-cell energy converter, and an electrical engine. All in all, this summer was H2FLY’s eight flight test campaign. The hydrogen-electric HY4 has been flying since 2016, but this summer’s breakthrough consists of operating the plane on liquid hydrogen, as opposed to hydrogen as gas. 

Liquid hydrogen is more energy dense than its gaseous counterpart. That means that it requires significantly lower tank weights and volume. In the world of air transport, especially when retrofitting planes, this equals not having to throw out as many passenger seats, or reduce cargo space, i.e. payload. 

But perhaps more significantly, it unlocks a much greater range. For the HY4 test aircraft, this equals 750km on gaseous hydrogen vs. 1,500km on liquid — or double the distance. On the other hand, liquid hydrogen requires cryogenic temperatures (around -253°C), which adds to the complexity of transporting and refuelling. 

Retrofitting existing airframes with hydrogen fuel-cell propulsion system

The HY4, made out of glass fibre and carbon fibre, will not go into commercial production. The next step from H2FLY will now be to scale the fuel-cell system to megawatt capacity. The H2F-175 system will unlock not only longer range, but also altitudes of up to 27,000 feet. In a partnership with Deutsche Aircraft, the two intend to retrofit a 30-seat Dornier 328 demonstrator with H2FLY hydrogen-electric fuel cells and begin test flights by 2025.